Nio Eyes US stock sale in largest Chinese offering since Didi Bank & Insurance By Jacky Last updated Sep 8, 2021 Share (Bloomberg) — Nio Inc. withdrew the most in nearly three weeks after the unveiling of the largest US fundraising plan by a Chinese company since Didi Global Inc. Shares in the electric carmaker fell a whopping 6.3% on Wednesday after it announced plans to sell up to $2 billion worth of U.S. deposit shares, which would increase its cash holdings amid supply chain disruptions and ahead of its planned IPO. in Hong Kong. The company’s plan for an offering to the market contributes to an excellent year for such deals. Unlike traditional stock offerings that serve institutional investors in one large transaction, these plans allow companies to sell stocks in the open market over time. If completed, Nio’s deal would be the largest US equity offering from a Chinese company since Didi’s now infamous IPO in June. US stock sales by companies based in China have declined since the ride-hailing company’s debut sparked a regulatory crackdown that weighed on investor sentiment. That pushed the Nasdaq Golden Dragon China Index down more than 30% between July 6 and its low on August 19. Nio’s US plan takes a different approach to fundraising from its rivals. Peer Li Auto Inc. last month raised $1.5 billion as part of an IPO in Hong Kong, while XPeng Inc. did the same in June. People familiar with the matter told Bloomberg in March that Nio is also considering listing on a second exchange, but this week’s offer could indicate a lack of progress. “We think this may reflect further delays in the Hong Kong listing process,” Deutsche Bank analyst Edison Yu wrote in a note. Nio did not immediately respond to a request for comment. Nio is widely seen as the closest competitor to Tesla Inc. in China and is one of the most prominent electric vehicle manufacturers in the country. It is well positioned to take advantage of government policies aimed at encouraging the rapid consumer adoption of electric cars. Supply chain issues While the global semiconductor shortage has spared no automaker worldwide, Nio has been most outspoken among EV makers about his struggles with the lack of supply. Last week, the company lowered its third-quarter supply outlook, citing ongoing uncertainty and volatility in chip supply. Story continues Read more: China looks at ways to better target EV manufacturing resources According to Bloomberg Intelligence analyst Francis Chan, these problems may not go away anytime soon as Chinese ports, which are major bottlenecks, are still at risk of closure due to Covid outbreaks. Proceeds from all sales under the new plan could help Nio pay off debt and cut interest charges by about 90%, Bloomberg Intelligence analyst Steve Man said in an interview, freeing up money to invest in priorities such as research and his distribution network. Man doesn’t see the offer pointing to problems for the Hong Kong EV company’s plans. “The Hong Kong IPO is less about raising money, but more about listing in a bigger China,” he said. More stories like this are available on bloomberg.com Subscribe now to stay ahead of the game with the most trusted business news source. ©2020 Bloomberg LP window._taboola = window._taboola || []; _taboola.push({mode:'thumbnails-a', container:'taboola-below-article', placement:'below-article', target_type: 'mix'}); Share